3. 624 million
Not every industry is still emerging in China, however: The materials industry has come to be dominated by China lately, as exemplified by the 624 million tonnes of steel the nation used in 2011 alone. That was more than six times the amount of steel that the U.S., the second-place nation, used — and China further beat a second-place America six times over in steel production for 2011.
It’s a symbol of how China’s investment in its growing nation has fueled its global ambitions — and also a sign of how those ambitions can be a poison for investors. A caustic mix of oversupply and weak demand in the steel industry has taken down America and Europe’s top steelmakers, which have ceded the lead in the industry to China’s state-run behemoths, such as Wuhan Iron and Steel.
Wuhan’s stock has suffered as a result, but the contagion has plagued former titans of the industry. China’s quest to lead materials industries, combined with the general economic slowdown in the wake of the recession, has led to lean times in the materials sector. United States Steel Corporation (NYSE:X) in particular has seen its stock fall more than 40% over the past two years, and the company’s earnings have turned into the red for the past three fiscal years. Beijing has ramped down production across its state-run companies this year as a result of its slowdown, but China’s materials giants are still dominating this hard-hit sector.
Aluminum and other industries have fared just as poorly, as oversupply has forced factory closures and worse. It’s just one way that bigger isn’t always better for investors in China.
4. 44%
Forty-four percent isn’t even a majority, but it’s a huge number when dealing with a population like China’s. That’s the percentage of Chinese citizens on the Internet as of the end of June, according to the Chinese Internet Network Information Center. It’s an amount that adds up to 591 million people, more than the populations of the U.S. and Indonesia combined and a gain of 27 million Web-linked Chinese citizens since just the end of last year.
Out of all the industries standing to benefit from China’s growth, Internet companies may top the list. China’s increasing urbanization will only lead to more citizens on the Web, but Beijing’s restrictive Internet regulation has prevented many U.S. or other international companies from establishing a strong base in the country.
That’s led to a huge opportunity for Chinese search engine king Baidu.com, Inc. (ADR) (NASDAQ:BIDU) and other Chinese companies that have quickly filled the Internet vacuum. Baidu.com, Inc. (ADR) (NASDAQ:BIDU)’s not only captured a majority of the Chinese search-engine market in its young life, but it’s also established itself as a dominant force to come by pushing hard into the mobile market. Mobile revenue made up more than 10% of Baidu.com, Inc. (ADR) (NASDAQ:BIDU)’s total revenue last quarter, a first for the company. China’s mobile market stood at 420 million users at the end of last year, according to the China Internet Network Information Center, and Baidu.com, Inc. (ADR) (NASDAQ:BIDU)’s opportunity here is enormous.
5. 8.7 million
The auto market has exploded in China, and the 8.7 million passenger cars sold in the first six months of 2013 is a staggering amount. Even more eye-popping: That figure represented a 13.8% year-over-year gain, showing that the Chinese auto market’s only getting started in the country’s growing urban and middle-class segments.
Just how large is that number? America’s auto industry has bounced back well this year, and even that success has rewarded automakers with only 7.8 million American auto sales over the year’s first half. And that push came from the built-up demand caused by the advanced age of the average car on U.S. roads. China’s appetite for cars should only continue to increase its lead on all rivals.
